China Chemicals
Syngenta (Not Listed)
Syngenta’s history dates back to 1758. In the course of centuries of development, it has gained an edge in the agrochemical sector with products such as insecticides and herbicides, and a seed business that has gone global, according to the company.
Syngenta: ChemChina acquired this centuries-old agrochemical giant in 2017
Syngenta Group’s history traces back to 1758, when it started out as a chemical company. In the course of centuries of development, it has gained an edge in the agrochemical sector with products such as insecticides and herbicides, and a seed business that has gone global, according to the company. In 2017, ChemChina completed the acquisition of Syngenta. In June 2020, Syngenta Group was formally established by Syngenta, Adama and the Ministry of Agriculture & Rural Affairs, becoming the world’s largest plant protection company and the third largest seed company. After completing the asset reorganization, the Syngenta Group was divided into four major business units: Syngenta Plant Protection, Syngenta Seeds, Adama and Syngenta Group China. Based on the company’s prospectus, its revenue came to RMB42.84bn in 1Q21, up 10.80% yoy, and net profit was RMB3.77bn, up 72.23% yoy.
Plant protection: global leader in market share; R&D and innovations
In 2020, the global market for plant protection products used in agriculture was USD60.8bn, and we expect a CAGR of 2.3% over the next five years. Syngenta’s history in the agrochemical business dates back more than 250 years. It has resources in research, production and sales. In 2020, it accounted for 24% of the global plant protection market, placing it at the forefront in this business. According to the company, the leading provider of proprietary crop protection products owns global product patents and has more than 30 R&D centers, such as Stein in Switzerland and Jealott’s Hill in the UK. As the global crop protection market continues to shift toward non-patented products, the injection of Adama and Yangnong Group has made Syngenta the world’s largest provider of non-patented plant protection products.
Seed business: transgenic technology and its China market
Seeds, as agricultural 「chips」, are of decisive significance to determine crop yield and quality. The global seed industry market could reach USD52.7bn in 2025E. The continuous increase in the penetration rate of biological breeding seeds has become an important driver in the development of the industry. Since 1990, yields of corn and soybeans in the US has increased 45-50% due to the promotion of biological breeding technology. At present, biological breeding technology represented by genetic modification (GM) could widen its applications in China's seed industry.
According to our calculations, the scale of China's GM corn market could reach RMB36bn, with profits estimated to reach RMB10.8bn. Syngenta has a long history in transgenic technology. As of July 2021, the US has approved a total of 133 transgenic traits: Syngenta has 9, second only to Monsanto, and its approved traits include corn, soybeans and cotton crops with insect and herbicide resistance. According to Syngenta, it has submitted its GM insect-resistant and herbicide-tolerant corn for domestic applications. In addition to plant protection and seed business, the company’s crop nutrition and modern agricultural services are also market leaders in China, according to the company.
Risks include: competition risks; goodwill impairment risks; intangible assets impairment risks; and exchange rate risks. Note: all company information in this report is based on the company’s IPO prospectus and company announcements.
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China Chemicals
Syngenta (Not Listed)
Syngenta’s history dates back to 1758. In the course of centuries of development, it has gained an edge in the agrochemical sector with products such as insecticides and herbicides, and a seed business that has gone global, according to the company.
Syngenta: ChemChina acquired this centuries-old agrochemical giant in 2017
Syngenta Group’s history traces back to 1758, when it started out as a chemical company. In the course of centuries of development, it has gained an edge in the agrochemical sector with products such as insecticides and herbicides, and a seed business that has gone global, according to the company. In 2017, ChemChina completed the acquisition of Syngenta. In June 2020, Syngenta Group was formally established by Syngenta, Adama and the Ministry of Agriculture & Rural Affairs, becoming the world’s largest plant protection company and the third largest seed company. After completing the asset reorganization, the Syngenta Group was divided into four major business units: Syngenta Plant Protection, Syngenta Seeds, Adama and Syngenta Group China. Based on the company’s prospectus, its revenue came to RMB42.84bn in 1Q21, up 10.80% yoy, and net profit was RMB3.77bn, up 72.23% yoy.
Plant protection: global leader in market share; R&D and innovations
In 2020, the global market for plant protection products used in agriculture was USD60.8bn, and we expect a CAGR of 2.3% over the next five years. Syngenta’s history in the agrochemical business dates back more than 250 years. It has resources in research, production and sales. In 2020, it accounted for 24% of the global plant protection market, placing it at the forefront in this business. According to the company, the leading provider of proprietary crop protection products owns global product patents and has more than 30 R&D centers, such as Stein in Switzerland and Jealott’s Hill in the UK. As the global crop protection market continues to shift toward non-patented products, the injection of Adama and Yangnong Group has made Syngenta the world’s largest provider of non-patented plant protection products.
Seed business: transgenic technology and its China market
Seeds, as agricultural 「chips」, are of decisive significance to determine crop yield and quality. The global seed industry market could reach USD52.7bn in 2025E. The continuous increase in the penetration rate of biological breeding seeds has become an important driver in the development of the industry. Since 1990, yields of corn and soybeans in the US has increased 45-50% due to the promotion of biological breeding technology. At present, biological breeding technology represented by genetic modification (GM) could widen its applications in China's seed industry.
According to our calculations, the scale of China's GM corn market could reach RMB36bn, with profits estimated to reach RMB10.8bn. Syngenta has a long history in transgenic technology. As of July 2021, the US has approved a total of 133 transgenic traits: Syngenta has 9, second only to Monsanto, and its approved traits include corn, soybeans and cotton crops with insect and herbicide resistance. According to Syngenta, it has submitted its GM insect-resistant and herbicide-tolerant corn for domestic applications. In addition to plant protection and seed business, the company’s crop nutrition and modern agricultural services are also market leaders in China, according to the company.
Risks include: competition risks; goodwill impairment risks; intangible assets impairment risks; and exchange rate risks. Note: all company information in this report is based on the company’s IPO prospectus and company announcements.
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此文件僅發給指定收件人或機構。其內容可能包含某種享有法律特權或者需要保密的信息。對於任何未經本公司授權而對本文件所載內容進行使用、披露、分發、變更之行爲及由此產生的後果，天風國際證券集團有限公司及其聯屬公司和附屬公司（「天風集團」）概不承擔任何責任。如您並非此文件的指定收件人或機構，請立即通知天風集團，並立即銷燬此文件。謝謝合作。
This message is intended only for the individual or entity to which it is addressed. It may contain legally privileged and/or confidential information. TF International Securities Group Limited and its affiliates and subsidiaries (「TF Group」) does not accept liability for the unauthorized use, disclosure, distribution and/or alteration of any information it contains or the consequences thereof. If you are not an intended recipient, please inform TF Group and destroy this message immediately. Thank you.
